State and Local Tax Deduction Relief Bill

The SALT Marriage Penalty Elimination Act was introduced today,  If enacted it would be retroactive to 2023 taxes.

The bill would increase the current $10,000 state and local tax (SALT) itemized deduction limitation to $20,000 for married taxpayers filing jointly if their adjusted gross income is less than $500,000.

- If their joint AGI is over $500,000 (even by a $1) then the $10,000 cap still applies.

- the law only applies to joint returns, no reference was made to single or Married Filing Separately

- it's for 2023 year only

CURRENT LAW

For tax years 2018 through 2025, the itemized deduction for state and local taxes paid, including state income taxes, sales taxes, real estate taxes, and personal property taxes, is limited to $10,000 ($5,000 MFS). Therefore, the $10K SALT limit increases the marriage penalty since the amount is not doubled for married taxpayers.